Going International: 5 Tips for Meeting KYC Requirements

by / ⠀Entrepreneurship Funding Personal Finance Startup Advice Travel / December 28, 2013

international business

Since the implementation of Know Your Customer (KYC) regulations, international business has been forever changed. Governments, banks, and businesses must comply with tightened security measures to combat money laundering, identity theft, and possible terrorist funding.

Navigating different nations’ specific requirements can be tricky, but doing so will enable your business to expand. Here are five ways to manage the process:

1. Know Your World

For many industries, following KYC regulations is not optional. Banks, markets, and financial institutions unfortunately become prime targets for fraudulent organizations. Your business could unknowingly support illegal and violent parties without following the appropriate KYC requirements.

Within the United States, these regulations were supported by the Patriot Act of 2001 and made mandatory for all banks by October 2002. These regulations were made more stringent with the enactment of the Dodd-Frank Act in 2010.

The Reserve Bank of India introduced KYC guidelines to all its banks in 2002. Several other nations, including South Africa and New Zealand, have instituted KYC guidelines. However, no set of completely consistent guidelines exists across borders yet. Each nation can institute different practices and procedures to ensure legal activity.

Today, more businesses are seeking global opportunities. Giant multinationals, as well as home-based services, strive for international markets. Within this framework, it’s vital to identify potential threats and valuable resources. Research your intended markets thoroughly to make sure your practices comply with existing guidelines.

2. Use Available Resources

Your most significant resources are available databases that allow you to verify client information instantly via electronic means. They can provide convenient and secure service to your business and potential clients.

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Many businesses limit their operations to nations where databases are readily available. While this practice aids expediency, it could also limit your customer base to select markets. In addition, technology and access costs can mount quickly, depending on your potential target markets.

Old-fashioned methods can also be used to verify data, such as phoning or writing to clients. Hybrid mail services enable verification letters to be mailed globally from international locations so they reach clients quickly. Several financial services organizations meet KYC requirements by incorporating these non-digital verification systems.

3. Build Relationships

Working with regulatory agencies can be complex and challenging. Building healthy, productive relationships with these governmental bodies is essential — these agencies have the power to halt your trades and even shut down your business. Governments do not, however, dictate exactly how you operate. The ruling guidelines can — and do — change as circumstances change.

Government compliance teams should continually work with these institutions to maintain secure and successful commerce. Remember that overnight answers might not be possible, but long-term relationships can be forged with these regulatory agencies. Governments naturally want to encourage commerce in a secure and effective manner.

4. Create Solutions

Think creatively to meet your KYC requirements. Online databases and automated verification programs can certainly ease the way, but you might have to seek other solutions. Common alternative verification approaches include phone calls, certified documentation, and activation codes sent to customers’ residences to confirm applicants reside at their given addresses. These avenues may be the most feasible — depending on the size of your operation — and modern hybrid mail solutions and automated calling options can result in faster response rates than were previously possible for businesses with global client bases.

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Keep in mind that criminals are continually able to find new ways to circumvent digital security programs to further complicate KYC matters. In light of evolving criminal activity, due diligence obligations are frequently updated and altered.

5. Personalize the Customer Experience

Staying ahead of the game and establishing viable means of compliance is critical. However, a creative and possibly “antiquated” approach could actually improve your connection to clients or customers.

Businesses constantly work to improve customer satisfaction and service to retain lifelong connections and referrals. In an era when many customers feel distanced or disgruntled by strictly digital, automated interactions, taking the time to connect on a personal level can work to your advantage.

Something as simple as a personalized letter, email, or welcome survey can work to fulfill KYC requirements, as well as provide you with important information to tailor your service. With this perspective, KYC is not a burdensome regulation to complete — it’s a chance to raise your customer knowledge and support to the next level.

The convenience and immediacy of digital business are, regrettably, balanced by criminals looking for profitable opportunities. KYC rules help provide protection from these elements. By raising your awareness of current regulations, working with government agencies to create solutions, and embracing customer service, you can grow your business in international markets.

Peter C. Harris is the founder and managing director of QiQ. Following a move to Australia in 2001, Peter recognized the potential for an affordable mail service that combined traditional mail with the speed of the Internet. This led to the development of the business’s first hybrid mailing solution, L-Mail.com, and more recently, Docsaway. These solutions are frequently used by businesses wishing to meet KYC requirements. You can reach out to Petter on Google+.

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Image Credit: www.captivate.com 

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on Under30CEO.com, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.